MINING WATCH NEWS RELEASE: Diamonds and Development: Attawapiskat and the Victor Diamond Mine

Thursday, December 15, 2011

In the last two weeks there has been an intense media storm around the current housing crisis in Attawapiskat, a remote Cree community on the coast of James Bay. The crisis is occurring in the context of many long-standing issues that are certainly not unique to Attawapiskat. Hopefully, the current attention will provide some immediate relief for the situation in Attawapiskat but also help drive an eventual resolution to the root issues that are causing the current crisis.

One element of the story that’s getting some attention and is of particular interest to MiningWatch is the fact that the community is ‘host’ to DeBeers’ Victor diamond mine, located 90 km west of the community, upstream on the Attawapiskat River, within the traditional territory of the Omushkego Cree. The juxtaposition is stark: a diamond mine producing millions of dollars of a sparkling luxury item, next to the poverty and infrastructure deficits in Attawapiskat.  It has led people to ask us: if there are millions of dollars of diamonds being taken from their traditional territory, why aren’t the conditions in the community improving?

If there were expectations in the community and in the broader public that the mine would be able to help the community overcome its infrastructure problems, clearly it has not. This reality points to the challenges inherent in mining as a means of development in remote communities.

Attawapiskat has not become a “mining” town in the conventional sense. Fly-in camps, which are now the norm for modern mines, including Victor, establish temporary infrastructure at their sites with no pretence of developing a permanent town site. This presents a significant challenge for a host community like Attawapiskat to capture economic spin-offs as workers do not stay in or even pass through the community to spend any of their substantial salaries. On the flip-side, fly-in mines have the advantage of preventing small remote communities from being overrun by mine workers, facing challenges of providing housing and other services, and suffering some of the social impacts and cultural clashes that may occur.

DeBeers states that it employs some 100 people from Attawapiskat at the mine, but from that statistic it’s not clear how many of those people continue to live on the reserve. Some remote communities have experienced an exodus of people who, with income from a mine, move south to gain access to better living conditions, education, health care etc. It is certainly the right and choice of individuals and families to choose to re-locate but the implications for local community development need to be understood. Even when those with the mining jobs or who benefit from contracting opportunities choose to stay, the relatively undeveloped internal cash economy of communities like Attawapiskat limit opportunities to capture the income that comes from the mine. Also, the economic benefits to individuals don’t readily translate into improvements in housing or community infrastructure.

A member of the Attawapiskat community explained the situation with the mining income as a funnel that DeBeers is pouring money into. The community is at the narrow end of the funnel but at the top there are large holes out of which most of the money flows to lawyers, consultants, political elite etc. The millions of dollars in contracts that make up part of DeBeers “Aboriginal spend” also have limited direct benefits to the community as many of the contracts are undertaken through joint-venture agreements, of which the community retains a small percentage of the income.

One of the principal ways that governments and industry propose to link mining with community development is through the negotiation of Impact Benefit Agreements or IBAs. These agreements have become commonplace for new mines and are meant to compensate Indigenous communities for infringements on their rights and to gain their support for a project.

The signing of an IBA was identified as the key social mitigation measure for the Victor project in its environmental impact assessment. MiningWatch was critical of that assessment due to the poor quality and scope of the soci-economic baseline and the lack of a participatory research method for collection of data. While far from a complete solution, a better socio-economic assessment process preceding the development of a mine could help future projects to have a more positive social impact.

Relying on the IBA as the principal driver of social benefits at Victor and elsewhere is problematic because there is no legal standard or requirements for IBAs, and communities are left to try and get the best deal they can through negotiations with deep-pocketed, well lawyered multinational mining companies. A 2010 report from DeBeers states that payments to eight communities associated with its two mines in Canada totalled $5,231,000 that year. The same report indicates that a total value of diamonds sold by DeBeers in 2010 was $446,020,000.

Whatever Attawapiskat’s share of that $5-million is, given the chronic under-funding of the community, the need for expensive responses to deal with recurring crises, including one that DeBeers themselves may have precipitated by overloading the community’s sewage system, it’s not surprising that the community hasn’t been able to translate its IBA income into improvements in physical infrastructure.

The negotiation of one-off mine agreements, with no minimum requirements and the details of which remain confidential, is problematic aspect of mineral development in northern Ontario. These agreements give the appearance of absolving the Canadian and Ontario governments of their obligations to consult and accommodate Indigenous peoples. They do not however, recognize Indigenous nations as a jurisdictional authority and decision maker. They in no way address the fundamental and structural problems with the paternalistic and racist system of “management” of indigenous peoples, and they do not address the breaches of the treaty agreements made between Canada and the ancestors of the Omushkego and other Ontario Indigenous nations.

Unless  these fundamental issues are addressed, it is unlikely if not impossible for mining development in Ontario’s “Far North” to contribute significantly to community development of remote First Nations. This is an important consideration for Attawapiskat but also for the communities faced with the proposed developments further upstream along the Attawapiskat River in the “Ring of Fire”. The boom in exploration activity has resulted in significant chromite, nickel, copper and other deposits being identified. There are two mine projects currently going through environmental assessments and three more are considered “major exploration projects” by the Ontario government. MiningWatch is working with Matawa First Nations and other public interest and First Nations groups to improve the review process for these projects and apply the lessons of Attawapiskat and the Victor mine.